"Buy When Red, Sell When Green": Decoding the Right Strategy

There are many advises "Buy when it's red, sell when it's green" echoing in the crypto market. It sounds simple and appealing, but in reality, why do most investors still face failure? The reason lies in the misunderstanding of this principle and the lack of a solid trading strategy based on real evidence.

1. Misconceptions about "Red Days" and "Green Days" Most people, when seeing a "red" market day ( price drop ), think that the price will continue to go down, and when seeing a "green" day ( price increase ), they expect the price to soar. However, these are just surface perceptions and do not accurately reflect the nature of the market. Not every price drop is a buying opportunity:

Many investors make the mistake of only focusing on the color of the candles on the chart without analyzing the reasons for the price drop. Not every price drop is a "discounted buying opportunity." Some drops are just traps that continue to push the price down, or are indicative of a deep downward trend (slow death) in the market. The hustle and emotions lead to mistakes:

Investors can easily get caught up in emotions: when the market is down, they rush to sell to avoid losses; when the market is up, they hurriedly buy in the hope that prices will keep rising without a proper risk management trading strategy. 2. "Zoom Out" Strategy – A Comprehensive View from the Weekly Time Frame To find real opportunities, one should not focus solely on daily charts. Instead, "zoom out" to longer time frames like weekly, where the market structure truly becomes clear. Key price levels:

These price levels are where the market has reacted multiple times: The areas where the price has bounced and continuously recovered. The price levels where, after being breached, the market has refused to allow the price to close below. The resistance levels have turned into support after being "broken through."

The indicator of "smart money":

These price levels are often where large investors (smart money) concentrate their trading. When the price reaches important technical support levels and shows strong signs of recovery, it may be an indication that the market has identified a buying opportunity. 3. Confirm the Transaction Before Starting the Price Do not rush to "buy on impulse" based solely on the color of the candle. The correct trading strategy must include waiting for confirmation signals from the market: Signs of major buyer intervention: Candlesticks with long shadows (long wicks) indicate that strong investors have intervened in price corrections.Weekly closes back inside key support levels after each temporarily crossed. The emergence of a sharp increase in trading volumes, signaling abundant purchasing power. The market is "just enough clue":

The market's bottom truly forms when the price structure holds firm, panic selling peaks, and the majority of investors start to abandon their positions. This is not the time when the market looks "safe" but rather when everyone is extremely fearful and ready to buy at a good price. 4. Conclusion: Buy into Real Opportunities, Not Just "Classic Buying" The crypto market does not always follow simple rules of "buy when it's red, sell when it's green." Smart players know how to make judgments based on the overall structure of the market and strong confirmation signals. Instead of chasing emotions and clinging to days when the market is red or green, you need to: Cautious technical analysis: Use weekly charts to identify important support and resistance levels. Wait for confirmation: Never rush to "hunt" for the bottom when there are no clear signs of a reversal. Control emotions: Knowing that emotions can cloud even effective investment strategies, patience and strategy are vital.

Thus, the goal of the trading strategy is not just to "buy according to color" but to "buy according to evidence" – the technical data and behaviors of major investors in the market. When you have grasped the important price levels and confirmation signals, you can confidently participate in the market without being swept away by temporary emotions.